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Friday, June 22, 2012

HBC Marketers Ramp Up for the New Majority

African-American? Hispanic? Asian? Other minority or multi race/ethnicity?  Today in the U.S., a “yes” to one of these is becoming more and more likely.  According to U.S. Census Bureau projections, the number of non-white U.S. residents reached 113 million in 2010, and these collective minorities are expected to eclipse  white non-Hispanics as early as 2042.  When this occurs, the minority population will collectively become a new majority.  The market  for "ethnic" health and beauty care has therefore never been more appealing, both in terms of product options for consumers and of marketers looking for sales spikes in tandem with the demographic tides.  (Albeit an outdated and offputting term,  "ethnic" remains the HBC industry descriptor for specialty products targeting white non-Hispanics).

Although the U.S. market for ethnic health and beauty care (EHBC) is already valued at close to $3 billion, significant growth potential remains.  As reported in Packaged Facts’ Ethnic Hair, Beauty and Cosmetics Products in the U.S. (July 2012), racial/ethnic minorities still use general-market products far more often than ethnic-specific ones—at a rate greater than ten-to-one.  At the same time, EHBC is expanding much faster than general HBC as minority consumers increasingly demand products specifically formulated to meet their needs.

Prompting the growth in demand for these products is the  burgeoning number of minority consumers in the U.S., a sharp and steady increase in their buying power, and a rapidly expanding array of product options.  In the past, minority consumers seeking specialized personal care products had little to choose from, and the distribution of products that were available was partially limited to alternative channels including barbers and beauty supply stores. Now, mass retailers such as Target and CVS are coming on strong in EHBC, stocking brands that just ten years ago they would not have considered carrying, and devoting entire shelving sections to EHBC.

Of particular interest are makeup products that identify and address the specific skin concerns of the different minority communities.  Another up and coming segment is grooming products for minority men beyond shaving lotions and dandruff shampoos, as it becomes socially acceptable and even a social imperative for men to adopt grooming habits and products previously viewed as somehow too attentive and less than masculine.  Regardless of gender, many minority consumers want products that work for them rather than having to make do with what is available.

A handful of highly successful EHBC marketers have already figured this out.  And while many mainstream HBC products are activly positioned on a cross-multicultural basis, marketers committing to targeted products that meet the skin, hair and cosmetic needs of African-Americans, Hispanics, Asians, and other racial/ethnic groups appear set to attract growing communities of Americans looking for brands and products that speak directly to them.

1 comment:

  1. It is my understanding that Hispanics are more brand loyal than the average US consumer, therefore marketing committing to target this group might create a loyal customer base for many years to come. It is not clear in the literature though, if this trend applies only to first generation Hispanics in the US, or to US born Hispanics as well.

    One of the explanations for that trend is that First Generations Hispanics in the US are more adverse to change and like to stick with certain products once they find something they like.

    Very interesting article, thanks!